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Pay & Leave Pay Administration

Fact Sheet: Grade and Pay Retention Examples

Converting retained rates on May 1, 2005

On May 1, 2005, convert locality-adjusted retained rates to new retained rates of an equal amount. Employees will not receive locality pay on top of the converted retained rates. Process this conversion before any other pay action that takes effect on May 1, 2005. (See 5 CFR 536.309.)

April 30, 2005: GS-11, step 00, employee with an official worksite in the Rest of U.S. (RUS) locality pay area receives a retained rate under 5 CFR part 536.

Grade Retention-Placement of a special rate employee in a lower-graded non-special rate position as a result of a reduction in force (RIF) (no geographic conversion)

In 2005, a GS-0083-9, step 3, police officer with an official worksite in Los Angeles, CA, who is covered by special rate table 983E ($53,841) is placed, as the result of a RIF process, in a GS-8 non-special rate position also located in Los Angeles. (Note: No geographic conversion is necessary in this situation.) The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the GS-9 grade for 2 years or until a terminating action occurs under 5 CFR 536.208. Determine the employee's rate of basic pay under grade retention as follows:

Step A: Compare the rate for the former position with the rate for the new position at the same grade and step.

Step C: Since the employee's existing payable rate of basic pay is less than step 10 of the LA locality rate range, the employee is entitled to the lowest step in that rate range that equals or exceeds his or her existing payable rate of basic pay.

Grade Retention-Placement of a non-special rate employee in a lower-graded special rate position as a result of a reduction in force (RIF) (no geographic conversion)

In 2005, a GS-4, step 10, non-special rate employee with an official worksite in the Atlanta, Georgia, locality pay area ($32,648) is placed in a GS-3 special rate position covered by special rate table 0072 at the same official worksite as the result of a RIF process. The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the GS-4 grade for 2 years or until a terminating action occurs under 5 CFR 536.208. With respect to the new position with a retained grade of GS-4, the highest applicable rate range is the GS-4 range on special rate table 0072. Determine the employee's rate of basic pay under grade retention as follows:

Step A: Compare the rate for the former position with the rate for the new position at the same grade and step.

Grade Retention-Placement of a non-special rate employee in a lower-graded special rate position (geographic conversion applies)

In 2005, a GS-0025-5, step 4, park ranger whose official worksite is located in the RUS locality pay area and who is not covered by a special rate schedule receives written notice of a reorganization that would affect the employee''s position. The park ranger moves to a GS-0025-4 park ranger position in New York, where special rates do apply (special rate table 0241). The park ranger meets the eligibility requirements for optional grade retention under 5 CFR 536.202 and 536.203, and the agency decides to provide grade retention. The park ranger will retain the GS-5 grade for 2 years or until a terminating action occurs under 5 CFR 536.208. Determine the employee's rate of basic pay under grade retention as follows:

Geographic conversion rule

Step A: Since the park ranger is moving to a new official worksite where different pay schedules apply, convert the employee's rate of basic pay to the new pay schedules by applying the geographic conversion rule. Since the park ranger is entitled to grade retention, the action is a lateral reassignment, and geographic conversion can be applied by simply setting the park ranger's rates of basic pay in the applicable pay schedule(s) for the park ranger's new position of record after the RIF action (including the retained grade) which correspond to the employee's grade and step immediately before the action. (See 5 CFR 536.206(b).) (Note: If pay retention is potentially involved, the geographic conversion rule must be applied to determine what the employee's payable rate would be if the employee's former position were located at the same official worksite as the new position. That converted rate would be treated as the employee's existing rate in applying pay retention rules. See Example 15. This step is not necessary if (1) the former position and new position would be covered by the same highest applicable rate range in the new location, or (2) the highest applicable rate range for the new position provides a higher payable rate at the given step. The first condition applies in Example 4; thus, pay retention is not involved.)

Grade Retention-Placement of a non-special rate employee in a lower-graded non-special rate position as a result of a RIF (no special rate applies to former position after geographic conversion)

In 2005, a GS-12, step 4, non-special rate employee with an official worksite in Dallas, TX, ($68,630) is placed in a GS-11 non-special rate position with an official worksite in the "Rest of U.S."(RUS) locality pay area as the result of a RIF process. The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the GS-12 grade for 2 years or until a terminating action occurs under 5 CFR 536.208. Determine the employee's rate of basic pay under grade retention as follows:

Geographic conversion rule

Step A: Since the employee is moving to a new official worksite where different pay schedules apply, convert the employee's rate of basic pay to the new pay schedules by applying the geographic conversion rule. If the agency converted the employee's former position to the new official worksite, the converted former position would have the same highest applicable rate range as the new position-the RUS locality rate range for GS-12. Thus, pay retention is not potentially applicable, and geographic conversion can be applied by directly setting the employee's rate of basic pay in the applicable pay schedule for the employee's new position of record after the RIF action (including the retained grade) which corresponds to the employee's grade and step immediately before the action. This is the employee's existing payable rate of basic pay for the purpose of considering whether pay retention applies. (See 5 CFR 536.206(b).)

Pay retention rules

Step B: While the employee is entitled to a lesser payable rate after the RIF, the reduction is entirely attributable to geographic conversion; therefore, pay retention does not apply. (See 5 CFR 536.303(a) and 536.304(a)(3).) The employee's payable rate under grade retention is the GS-12, step 4, RUS locality rate ($66,632).

Grade Retention-Placement of an FWS employee in a GS position (no geographic conversion)

In 2005, a WG-9, step 2, employee with an official worksite in Baltimore, Maryland, is placed in a GS-7 position at the same worksite as the result of a reduction in force. The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the WG-9 for 2 years or until a terminating action occurs under 5 CFR 536.208. Determine the employee's rate of basic pay under grade retention as follows:

Step A: Compare the representative rates of the WG and GS grades to determine whether the GS grade is equal to, higher than, or lower than the WG grade.

Pay Retention-Placement of a special rate employee in a non-special rate position (no geographic conversion)

In 2005, a GS-2210-11, step 5, employee with an official worksite in the New York locality pay area is receiving a special rate on the information technology (IT) special rate table 999E. The employee is reassigned by management action to a GS-343-11 non-special rate position with the same official worksite and may be eligible for pay retention under 5 CFR 536.301. Determine the employee's pay retention entitlement as follows (see 5 CFR 536.304(a)-(b)):

Step A: Compare the employee's existing payable rate of basic pay with the maximum rate of the highest applicable rate range for the grade of the employee's new GS-343 position of record (i.e., the position of record immediately after the event causing the pay retention entitlement).

Step B: Since the employee's existing payable rate of basic pay is less than the maximum rate of the locality rate range as shown in step A, the employee is entitled, under pay retention rules, to the lowest rate of basic pay in that range that equals or exceeds the employee's existing payable rate of basic pay. Once the employee's rate is set within a rate range, pay retention ceases to apply.

Pay Retention-Placement of a special rate employee in a non-special rate position (special rate applies to former position after geographic conversion)

In 2005, a GS-2210-9, step 8, employee with an official worksite in San Jose, CA, is receiving a special rate on the IT special rate table 999F ($64,096). The employee is reassigned by management action to a GS-343-9 non-special rate position with an official worksite in San Diego, CA, and may be eligible for pay retention under 5 CFR 536.301. Determine the employee's pay retention entitlement as follows (see 5 CFR 536.304(b)):

Geographic conversion rule

Step A: Identify the highest applicable rate range that would apply to the employee's former position of record (before the pay action) as if that position were stationed at the new official worksite. (See 5 CFR 536.303(a).)

Applicable pay schedule for GS-2210-9 in San Diego = IT special rate table 999C

Pay retention rules

Step C: Compare the San Diego existing payable rate of basic pay identified in step B to the maximum rate on the highest applicable rate range for the employee's new GS-343 non-special rate position (i.e., the San Diego locality pay table). Since the employee's existing payable rate of basic pay identified in step B is greater than the maximum rate of the San Diego locality pay table, the employee is entitled to a retained rate equal to the existing payable rate of basic pay. (See 5 CFR 536.304(b). Note that the retained rate does not exceed 150 percent of the range maximum.)

Pay Retention-Placement of a special rate employee in a non-special rate position (no special rate applies to former position after geographic conversion)

In 2005, a GS-1529-7, step 1, employee with an official worksite in Washington, DC, is receiving a special rate on special rate table 0032 ($40,960). The employee is reassigned by management action to a GS-1529-7 non-special rate position with an official worksite in Atlanta, GA, and may be eligible for pay retention under 5 CFR 536.301. Determine the employee's pay retention entitlement as follows (see 5 CFR 536.304(b)):

Geographic conversion rule

Step A: Identify the highest applicable rate range that would apply to the employee's former position of record (before the pay action) if that position were stationed at the new official worksite.

Pay retention rules

Step C: While the employee is entitled to a lesser payable rate after placement into the non-special rate position, the reduction is entirely attributable to geographic conversion; therefore, pay retention does not apply. (See 5 CFR 536.303(a) and 536.304(a)(3).) The employee's payable rate is the GS-7, step 1, Atlanta locality rate ($34,807).

Pay Retention-Placement of a Federal Wage System (FWS) employee in a GS position (no geographic conversion)

In 2005, a WL-08, step 3, employee with an official worksite in Washington, DC ($22.71 per hour) is placed by management action in a GS-9 non-special rate position that is also located in Washington, DC. The employee is not entitled to grade retention.

Step A: Convert the WL hourly rate of pay to an annual rate of pay by multiplying the hourly rate by 2,087. This annual rate is the employee's existing payable rate of basic pay in applying step B.$22.71 times 2,087 = $47,396.

Step B: Compare the existing payable rate identified in step A to the maximum rate of the highest applicable rate range for the grade of the employee's new position of record (after the event causing the pay retention entitlement). Since the employee's existing payable rate is less than the maximum rate of the DC locality rate range, the employee is entitled to the lowest rate in that range that equals or exceeds his or her existing payable rate of basic pay. After the employee's pay is set within the rate range, pay retention ceases to apply. (See 5 CFR 536.304(b).)

Pay Retention-Placement of a Federal Wage System (FWS) employee into a GS position (geographic conversion)

In 2005, a WG-12, step 4, employee with an official worksite in Seattle, Washington, is placed by management action in a non-special rate GS-11 position in Portland, Oregon. The employee is not entitled to grade retention.

Geographic conversion rule

Step A: Convert the employee's rate in the WG-12 position in Seattle to the WG-12 position in Portland at the same step. (Note: The reduction of the employee's hourly rate resulting from geographic conversion does not result in pay retention. The rate resulting from geographic conversion is treated as the employee's existing rate in applying pay retention rules. See 5 CFR 536.303(a) and 536.304(a)(3).)

Pay retention rules

Step B: Convert the employee's existing WG hourly rate of pay (i.e., the Portland rate) to an annual rate of pay by multiplying the hourly rate by 2,087. This annual rate is the employee's existing payable rate of basic pay in applying step C.

$26.15 times 2,087 = $54,575

Step C: Compare the existing payable rate identified in step B to the maximum rate of the highest applicable rate range for the grade of the employee's new position of record (after the event causing the pay retention entitlement). Since the employee's existing payable rate is less than the maximum rate on the DC locality rate range, the employee is entitled to the lowest rate in that range that equals or exceeds his or her existing payable rate of basic pay. After the employee's pay is set within the rate range, pay retention ceases to apply. (See 5 CFR 536.304(b).)

In 2005, a GS-11, step 00, employee with an official worksite in the "Rest of U.S." (RUS) locality pay area and a retained rate of $66,746 moves to a new official worksite in the Washington, DC, locality pay area. The employee's grade is not changed, and the employee's former and new positions of record are not covered by a special rate. Convert the employee's retained rate to the new geographic location as follows. (See 5 CFR 536.303(b) and 536.304.)

Geographic conversion rule

Step A: Identify the maximum rate for the highest applicable rate range that applies to the employee's former position of record based on the former official worksite.

GS-11, step 10, RUS locality rate = $65,704.

Step B: Identify the maximum rate for the highest applicable rate range that would apply to the employee's former position of record if that position were located at the new official worksite.

GS-11, step 10, Washington, DC, locality rate = $68,209.

Step C: Divide the maximum rate identified in step B by the maximum rate identified in step A, and round the result to the fourth decimal place.

$68,209 ÷ $65,704 = 1.0381

Step D: Multiply the factor resulting from step C by the employee's retained rate and round to the nearest whole dollar to derive the employee's converted retained rate at the new official worksite.

Note: The employee's converted retained rate in the DC location is approximately 1.6 percent above the maximum rate of the highest applicable rate range ($69,289 ÷ $68,209 = 1.016), just as the employee's retained rate in the RUS location was approximately 1.6 percent above the maximum rate of the highest applicable rate range ($66,746 ÷ $65,704 = 1.016). Thus, the geographic conversion rule maintains the relative position of the employee's retained rate compared to the applicable rate range maximum.

Pay retention rules

Step E: Identify the highest applicable rate range for the employee's new position in the new location. In this case, that range is the same range identified in step B (i.e., the DC locality rate range for GS-11); therefore, the employee's retained rate is $69,289. (Note: If a change in position or pay schedule after geographic conversion would have resulted in a different highest applicable rate range, the retained rate from step D would be compared to that range, as provided in 5 CFR 536.304(c). The retained rate would be eliminated if it were less than the maximum of that rate.)

In 2005, a GS-7, step 00, employee with an official worksite in the Seattle locality pay area and a retained rate of $46,600 moves to a new official worksite in the Sacramento locality pay area. The employee's grade is not changed, and the employee's former and new positions of record are not covered by a special rate. Convert the employee's retained rate to the new geographic location as follows. (See 5 CFR 536.303(b) and 536.304.)

Geographic conversion rule

Step A: Identify the maximum rate for the highest applicable rate range that applies to the employee's former position of record based on the former official worksite.

GS-7, step 10, Seattle locality rate = $46,307

Step B: Identify the maximum rate for the highest applicable rate range that would apply to the employee's former position of record if the employee were stationed at the new official worksite.

GS-7, step 10, Sacramento locality rate = $46,299

Step C: Divide the maximum rate identified in step B by the maximum rate identified in step A, and round the result to the fourth decimal place.

$46,299 ÷ $46,307 = 0.9998

Step D: Multiply the factor resulting from step C by the employee's former retained rate and round to the nearest whole dollar to derive the employee's converted retained rate at the new official worksite.

Note: The employee's converted retained rate in the Sacramento location is approximately 0.6 percent above the maximum rate of the highest applicable rate range ($46,591 ÷ $46,299 = 1.006), just as the employee's retained rate in the Seattle location was approximately 0.6 percent above the maximum rate of the highest applicable rate range ($46,600 ÷ $46,307 = 1.006). Thus, the geographic conversion rule maintains the relative position of the employee's retained rate compared to the applicable rate range maximum. The reduction in the retained rate in this example is attributable to geographic conversion and is not a basis for pay retention.

Pay retention rules

Step E: Identify the highest applicable rate range for the employee's new position in the new location. In this case, that range is the same range identified in step B (i.e., the Sacramento locality rate range for GS-7); therefore, the employee's retained rate is $46,591. (Note: If a change in position or pay schedule after geographic conversion would have resulted in a different highest applicable rate range, the retained rate from step D would be compared to that range, as provided by 5 CFR 536.304(c). The retained rate would be eliminated if it were less than the maximum of that rate.)

Geographic conversion of a retained rate resulting in a pay reduction (movement from a special rate schedule to a locality pay schedule)

In 2005, a GS-0602-6, step 00, practical nurse in San Diego is receiving a retained rate of $43,000. In San Diego, the nurse's highest applicable rate range is the GS-6 range from special rate table 0346. The nurse moves to a GS-0602-6 position in Washington, DC, where the highest applicable rate range that applies to the employee is a hybrid rate range consisting of GS-6 special rates from special rate schedule 0303 (steps 1-8) and GS-6 locality rates from the DC locality pay schedule (steps 9-10). Convert the employee's retained rate to the new geographic location as follows. (See 5 CFR 536.303(b) and 536.304.)

Geographic conversion rule

Step A: Identify the maximum rate for the highest applicable rate range that applies to the employee's former position of record based on the former official worksite.

GS-6, step 10, special rate table 0346 = $42,179

Step B: Identify the maximum rate for the highest applicable rate range that would apply to the employee's former position of record if the employee were stationed at the new official worksite. (As explained above, the highest applicable rate range is a hybrid range with a locality rate maximum.)

GS-6, step 10, DC locality rate = $41,474

Step C: Divide the maximum rate identified in step B by the maximum rate identified in step A, and round the result to the fourth decimal place.

$41,474 ÷ $42,179 = 0.9833

Step D: Multiply the factor resulting from step C by the employee's former retained rate and round to the nearest whole dollar to derive the employee's converted retained rate at the new official worksite.

Note: The employee's converted retained rate in the DC location is approximately 1.9 percent above the maximum rate of the highest applicable rate range ($42,282 ÷ $41,474 = 1.019), just as the employee's retained rate in the San Diego location was approximately 1.9 percent above the maximum rate of the highest applicable rate range ($43,000 ÷ $42,179 = 1.019). Thus, the geographic conversion rule maintains the relative position of the employee's retained rate compared to the applicable rate range maximum. The reduction in the retained rate in this example is attributable to geographic conversion and is not a basis for pay retention.

Pay retention rules

Step E: Identify the highest applicable rate range for the employee's new position in the new location. In this case, that range is the same range identified in step B (i.e., the GS-6 hybrid range); therefore, the employee's retained rate is $42,282. (Note: If a change in position or pay schedule after geographic conversion would have resulted in a different highest applicable rate range, the retained rate from step D would be compared to that range, as provided in 5 CFR 536.304(c). The retained rate would be eliminated if it were less than the maximum of that rate.)

Grade Retention and Pay Retention-Placement of a special rate employee in a lower-graded non-special rate position as a result of a RIF (geographic conversion)

In 2005, a GS-12, step 6, information technology (IT) specialist (GS-2210) with an official worksite in Miami, FL, is placed in a GS-11 non-special rate position with an official worksite in Orlando, FL, as the result of a RIF process. The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the GS-12 grade for 2 years or until a terminating action occurs under 5 CFR 536.208. Determine the employee's payable rate of basic pay as follows:

Geographic conversion rule

Step A: Since the employee is moving to a new official worksite where different pay schedules apply, convert the employee's rate of basic pay to the new pay schedules by applying the geographic conversion rule. Determine the employee's payable rate of basic pay under the pay schedules that would apply to the employee if his or her former IT position were located in the new location (Orlando). (This step is necessary if pay retention is potentially involved.) The resulting rate is considered the employee's existing payable rate of basic pay in applying pay retention rules.

Grade and payable rate of basic pay before RIF: GS-12, step 6, Miami locality rate = $73,864 (Note: In Miami, the GS-12, step 6, IT special rate under table 999C = $72,744, which is less than the corresponding locality rate and therefore not applicable.) Grade and payable rate of basic pay in Orlando after geographic conversion: GS-12, step 6, IT special rate under table 999B = $71,479 (which exceeds the corresponding Orlando locality rate of $70,689)

Grade retention rules

Step B: Determine the payable rate of basic pay for the new non-special rate position under grade retention. The employee is entitled under grade retention to the payable rate of basic pay for the new position (including the retained grade) that corresponds to the employee's existing step.

Step D: Since the employee's payable rate under grade retention from Step B is less than the employee's existing payable rate from Step A (after geographic conversion), the employee may be eligible for pay retention-assuming all other conditions are met. Determine the employee's pay retention entitlement by comparing the existing payable rate to the highest applicable rate range for the employee's new position (reflecting the retained grade). In this case, the existing rate is below the range maximum, and the employee is entitled to the lowest rate in the range that equals or exceeds the existing rate. Once the employee's pay is set within the rate range, pay retention ceases to apply.

Pay Retention-Placement of a Federal Wage System (FWS) employee in a GS position (no geographic conversion)

In 2005, a WL-09, step 5, employee with an official worksite in Atlanta, GA ($26.98 per hour), is placed by management action in a GS-9 non-special rate position also located in Atlanta, GA. The employee is not entitled to grade retention.

Step A: Convert the WL hourly rate of pay to an annual rate of pay by multiplying the hourly rate by 2,087. This annual rate is the employee's existing payable rate of basic pay in applying step B.$26.98 × 2,087 = $56,307

Step B: Compare the existing payable rate identified in step A to the maximum rate of the highest applicable rate range for the grade of the employee's new position of record (after the event causing the pay retention entitlement). Since the employee's existing payable rate is greater than the maximum rate of the Atlanta locality rate range, the employee is entitled to a retained rate equal to the employee's existing payable rate of basic pay, subject to the limitations in 5 CFR 536.304(b)(3). The employee's existing payable rate of basic pay is less than the rate for level IV of the Executive Schedule and 150 percent of the GS-9, step 10, Atlanta locality rate.

Geographic conversion rule

Step A: Identify the highest applicable rate range that would apply to the employee's former position of record (before the pay action/transfer of function) if that position were stationed at the new official worksite.

Pay retention rules

Step C: While the employee is entitled to a lesser payable rate after placement into the new locality pay area, the reduction is entirely attributable to geographic conversion; therefore, pay retention does not apply. (See 5 CFR 536.303(a) and 536.304(a)(3) and 5 U.S.C. 5363(c).) The employee's payable rate is the GS-7, step 2, Philadelphia locality rate ($42,763).